Home Care Providers Can Keep Tapping ‘Free Money’ Tax Credits

Home care agencies were scrambling this week to meet a filing deadline to receive tax credits through a program that has saved some providers hundreds of thousands of dollars.

Wednesday was the deadline set by the Internal Revenue Service (IRS) for some Work Opportunity Tax Credit (WOTC) filings. WOTC offers employers federal tax credits ranging between $2,400 and $9,600 who hire individuals from eligible target groups.

The WOTC program was initiated in 1996 and has since been extended and modified. The program recently was extended through the end of 2019, under the Protecting Americans from Tax Hikes (PATH) Act of 2015. After that law was passed, the IRS announced that any employer who hired a qualified new worker between Jan. 1, 2015, and Aug. 31, 2016, had until Sept. 28 to submit the necessary forms for WOTC. After that, employers would have the customary timeframe to file the needed forms: 28 days from a new hire’s first day of work.

As the IRS extension came to a close, home care agencies went into high gear, said Michael Markowitz, executive vice president with TC Services USA, Inc., a technology-forward tax credit screening firm. The company heard from hundreds of its home care clients in the lead-up to Wednesday’s deadline, Markowitz told Home Health Care News.

The bad news is that some agencies have missed out on the chance to apply for tax credits for new hires dating back to 2015—but the good news is that the WOTC program still is ongoing and a way for home care providers to give a boost to their bottom line.

Some agencies dismiss the idea that they can boost their revenue through WOTC because they don’t think they hire enough qualified individuals, but this likely is not true, said Derek Jones, vice president of marketing for home care technology company ClearCare, at this week’s Home Care Association of America Leadership Conference in Anaheim, California.

“About 20% of caregivers qualify, on average,” Jones said. That figure was corroborated by Markowitz and Les Wasser, controller of Any-Time Home Care Inc., which has eight branch offices in New York state.

Any-Time has received tax credits in the six figures over the course of about the last two years, Wasser told HHCN.

“It’s a win-win situation, you have nothing to lose,” Wasser said of home care companies filing for the credits. “You’re talking about tax credits, so it’s dollar-for-dollar in the owner’s pockets.”

Applying for the credits is not burdensome, he said. The company has new workers fill out the requisite forms during hiring process at the local branch, after which the forms go to Wasser, who adds the date of hire. Any-Time is a client of TC Services, so Wasser then sends the forms along to that company, usually once a week, Wasser said. TC Services receives a percentage of what Any-Time saves through its credits.

The typical WOTC tax credit that a home care agency receives for an eligible employee is about $2,400 according to Markowitz. However, it can be as much as the maximum of $9,600.

WOTC is not the only tax credit program that home care agencies can benefit from, and provider associations have begun to more actively evangelize to their members about tapping into these funds. For instance, the HCAOA, the Pennsylvania Homecare Association (PHA), and Home Care Association of Florida (HCAF) have partnered with TC Services to promote the value of tax credits.

If the experience of Any-Time is an indication, it’s a message that providers will be happy to hear—as Wasser put it, “It’s free money.”

Written by Tim Mullaney

Photo Credit: “Internal Revenue Service” by Ray Tsang, CC BY-SA 2.0